Oil has to be shipped.
Under Trump in 2018 it was the US that could respond with production output.
“Sky-high production in the US, coupled with incremental barrels coming from Saudi Arabia and Russia is starting to impact oil market balances. As such, crude oil inventories are starting to increase once again,” Bank of America Merrill Lynch said in a note.
The bank added that it expected U.S. crude production which is already at a record 11.6 million barrels per day (bpd), to break through 12 million bpd in 2019, making the United States “energy independent”.
1 Like
It’s almost like OPEC is a cartel specifically designed to control the spot price of oil or something.
Why can’t we have our own market and set our own price?
A couple of points in response.
-
The US was not energy independent as we still imported oil from Canada. We were independent from middle-east oil though which is a plus.
-
US unconventionals (where our incremental oil is coming from) has been losing money for years so investment has dried up as fiscal responsibility has set in. Companies are now very conservative in expanding production due to costs and need to show return in that investment to shareholders. They won’t react quickly as they want to make sure oil prices remain high.
-
Breakeven point for US oil is in the range of $30-$70/bbl while Saudi oil BEP is estimated at $8/bbl. That’s hard to compete against as they make money no matter what the price of oil is. They use their profits to fund their govt so they have additional pressures to provide revenue and open up the taps, so to speak.
Fair points.
Current price of crude is at the upper range of that very broad break even price point of 30-70/bbl.
It is certainly in the interest of domestic security and prosperity to encourage production while at this price level. If we were at or below the bottom end, as we were at the peak of the pandemic, then the US domestic production cuts do make sense.
It is time to build back better crude production…domestically…as much as can be done that makes an economic win for everyone.
The left would never allow it but it would make sense to set a floor price for domestically produced oil and sock it away in reserve if need be.
1 Like
Trump filled up the reserves when the market bottomed in 2020.
The markets do this on their own. Demand is still way down, prices have a large upside to go.
It would be wise to get ready for this.
2 Likes
Remember all the fun we had here discussing “Peak Oil.”
That reality in turn means that the U.S. shale industry is going to be especially hard hit over the next few years as demand slowly recovers. In an excellent op/ed this week, Dan Yergin said that “As a result of a drastic cutback in investment, shale output will go in reverse and decline. When growth returns, it will be at a slower pace.”
Yet, the growth will return because, as Yergin further states, “shale is now established as a formidable resource. The shale revolution has transformed the world oil market and is changing concepts of energy security.”
Supply-side “peak oil” theory was always wrong in the past because its proponents invariably underestimated the enormity of yet-to-be-discovered resource that lay beneath the ground in various parts of the world. In more recent years, Demand-side “peak oil” theory has always managed to overestimate the ability of renewable energy sources and electric vehicles to displace fossil fuels.
Excellent update and position of the role US domestic production will have moving forward. We can prod US production a little faster.
ITT a bunch of anti-authoritarian posters are mad that the federal government isn’t coercing private companies to drill more oil, wondering why we let private companies buy oil from foreign lands, and wondering why we don’t set up our own oil market and stay out of the global market.
1 Like
are you suggesting the government should forbid companies from selling oil outside of America and set market caps.
sounds like socialism.
The price in the U.S is global market price + taxes.
Because oil price is based on a global number WTI AND Brent crude. Nothing to do with who is InThe white house. As the article I posted stated there has been more domestic drilling permits since GW Bush and more then President Trump did.
You can repeat that until your fingers cramp, and they will ignore it.
I could post an industry paper about the fact that during Trump term more coal companies went bankrupt then in the previous 10 years despite him being all in for coal
Because of Trump policies?
What else would ha e caused it unless coal is old fuel
The market. Coal is old fuel. It is dying. No need to murder it.
There is an easy way to save it and that’s gasification but that doesn’t play well due to minimal workforce
What are we trying to save? If it doesn’t save the workforce, why bother?
